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Gold strikes 7-month high as funds buy, ETF at record
Tue Feb 17, 2009 7:15am GMT Print | Single Page[-] Text [+]
By Chikako Mogi

TOKYO (Reuters) - Gold rallied to its strongest in 7 months on Tuesday as buying by investors accelerated after prices surpassed last week's highs and the spectre of global economic instability lingered.

New York gold futures also hit their highest level since July, with the most active April contract rising as high as $961.1 an ounce, up $18.9, or 2 percent from Friday's New York settlement of $942.2 in after-hours trading.

"Chart-based buying and persistent demand for investment purposes have been the fundamental triggers for such accelerated gains when almost all other asset classes are heading further south," said Pradeep Unni, an analyst at Dubai-based Richcomm Global Services.

"If the economic crisis sustains, fund flow into the yellow metal may support the prices from any deep slide," he said.

Spot gold was trading at $957.20 per ounce, up $16.30 from late Monday's levels. It had hit a 7-month high of $958.80, surpassing last week's highs around $951, and was moving closer towards a record high of $1,030.80 struck last March.

U.S. markets were closed on Monday for the Presidents' Day holiday.

In Australia, gold also hit a record high $1,493.61 an ounce.

"Prices are rising in a thin market with little physical demand, and pushed higher by those drawing technical charts to see how far the market can go," said a trader at a Japanese firm.